Commodity prices have first weekly loss in 16 weeks

With such a large change in U.S. tax policy it is likely to have an effect on T-Bills. An investor can find a number of different commodity trading companies to take advantage of a change in tax policy at such a crucial time.

Illinois, IL (prHWY.com) October 10, 2012 - For the first time in 16 weeks commodity prices have had a loss. With all of the stimulus being created by central banks around the world including Japan, European Central Bank, and the Federal Reserve it looks to be sign that the market does not feel it will be enough. Stimulus by central banks or quantitative easing has been going on for a few years now. There has also been stimulus by the Federal Government and other governments around the world. Three of the four largest economies in the world are technically printing money in an attempt to lower interest rates enough that capital will leave government debt and move into the private sector. Capital is still not being lended out so what is the government supposed to do. The signs are clear, the market no longer has faith that stimulus measures by central banks can create growth, honestly I thought is would've happened sooner. Institutional investors have sold off long positions on futures contract to the tune of more than 1.2 million contracts. The U.S. government needs to wake up and see the signs that they must put a plan together that entices corporations who are sitting on record amounts of cash that they need to start spending. There is no confidence in the market place that the economy will be getting much better anytime soon. So entice corporation with limited time tax cuts that allow them to bring money back to the U.S. and spend it on expansion before it becomes expensive to do again.
commodity trading companies are letting go of their long positions that they have been building up on as they waited for economic signs that stimulus from the Fed was going to work. This commodity strategy is clearly sending a message to Washington that the Fed stimulus has not worked and cannot work in this environment. No matter how much you lower interest rates and attempt to get capital in the market it will not happen without confidence.

The futures strategy taken by these commodity trading companies was to go long and continue to roll over positions as the stimulus was going to either grow the economy and increase demand for specific commodities or it was going to create inflation which would decrease the value of the dollar and essentially create a rise in the prices of commodities. Their current futures strategy is too pull back and wait. Retail investors however, still have an interest in gold. Gold coins and bars as a commodity strategy have what I think to be the least amount of risk and whenever there is uncertainty in an economy, investors look to gold. Gold is a worldwide currency and whenever there is not trust left in a government or fear of government taking money from your pocket society looks to Gold. Although other commodities have topped off and begun a decline this week, Gold will continue to hold strong as fear of governments not doing anything continues. For more details please log on to www.cedarassetmanagementllc.com

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